Bluejay Mining pulls demerger plan, aims to raise $6 million

The Dundas ilmenite project, in Greenland, is Bluejay’s flagship asset. (Image courtesy of Bluejay Mining.)

Explorer and developer Bluejay Mining (LON: JAY) said on Tuesday it would not spin off its battery and critical metals exploration subsidiary Disko Exploration, as previously announced.

Executive chairperson Robert Edwards, who joined the Bluejay team in October, said that after completing a strategic review, the company has concluded a demerger was not the best way forward. 

The junior had announced last year the demerger of Bluejay and Disko Exploration, with the former holding on to the Dundas mineral sands project in Greenland, as well as its Finnish assets.

“Bluejay can achieve more by utilizing its existing platform and unified pool of expertise… which is almost unique,” Edwards said. “Our ability to successfully explore and progress projects, together with a suite of tier one partners, is our key strength. I would also add that Bluejay is clearly capable of progressing projects itself, something that I am determined the company should pursue more confidently in the future,” he added. 

Bluejay plans to raise up to $6 million via a three-part share subscription with US-based investor Towards Net Zero, LLC.

It noted it would used the funds toward the summer drilling program at the the lead-zinc-silver Kangerluarsuk project in West Greenland and for working capital purposes.

The first $2 million is expected next week, the firm said, with the second $2 million arriving in 2024. The third part is conditional upon approval of the investors and the board.

The initial subscription price is 10 pence a share compared with the company’s closing price of 4.80 pence on Monday. The value will then be reset and calculated on a planned formula and subject to adjustments, it said.

Bluejay counts among its backers mining giant Rio Tinto (ASX, LON, NYSE: RIO), with whom it is advancing the Enonkoski nickel project in Finland through  a joint venture and earn-in agreement

That deal could see the world’s second-largest miner progressively earn up to a 75% interest in the project by injecting $20 million into Enonkoski, either by covering expenses or paying cash equivalent amounts, over three stages.